Online advertising will grow at a faster pace in 2011 than overall advertising, according to estimates from Borrell Associates: namely online ad spending will grow almost 14%, from $45.6 billion in 2010, to $51.9 billion in 2011. Driving this growth will be the display format, a once quiet, even moribund subspace in the online ad industry.

Now, Borrell says, the format is a big driver of such fast-growing segments as the targeted local sector and social media. Display is expected to grow almost 60% in 2011, reaching $10.9 billion for national and local combined. (via MarketingCharts). While national advertisers will increase their use of targeted display by nearly 50%, local advertisers will outperform even that. Use of targeted display by advertisers local to the markets where their ads run will more than double, reaching more than $2.3 billion next year.

Commodity Display?

There are other signs that display is poised for a growth spurt. Although its second quarter earnings were disappointing to investors, Yahoo’s display advertising was one of it growth engines, with double-digit growth of 19% in the quarter.

One worrisome note has been sounded by Collin Gillis, an analyst with BGC Partners, who recently said in a client note that the industry is showing a dangerous propensity towards the "commoditization of display advertising" particularly by Google's ad exchange."

Value Add

The growth forecast by Borrell, though, likely will be spurred by new forms of display technologies. Jonathan Rosenberg, senior vice president of product management at Google, noted recently in a call with analysts that Google is experimenting with new types of display ads, such as expandable ads on YouTube and ads aimed at a specific audience, such as young women who like basketball. Then there is the deal Google and the Omnicom Group inked earlier this summer to collaborate on Google's audience-based ad auction system and the tools Omnicom's trading desk uses to access inventory. Meanwhile, Google is doing all it can to ratchet up its so-called commodity display ad network, routinely rolling out new tools and videos for its users.